Dip in revenue to $585.7m, due to lower equipment sales, is offset by fall in operating costs

StarHub has posted a 9.6 per cent jump in second-quarter net profit to $108.6 million as a dip in revenues was offset by a fall in costs.

Revenue for the three months ended June 30 slid 0.6 per cent to $585.7 million, on lower revenue from equipment sales. But the lower handset sales also brought operating expenses down 1.4 per cent year on year to $467.5 million.

Total service revenue, which excludes equipment sales, was $553.7 million, down 0.1 per cent as higher broadband and enterprise fixed service revenue was offset by lower mobile and pay TV takings.

Mobile revenue fell 1.8 per cent to $305.3 million in the quarter owing to lower usage of roaming and international direct dialling services, though this was partially offset by higher subscription revenue from a larger customer base.

StarHub added 20,000 post-paid mobile customers in the quarter, bringing its subscriber base to 1.36 million. About 66.3 per cent of its post-paid customers were on tiered data plans, from 62.7 per cent a year earlier. About 24 per cent of these users busted their data caps.

AT A GLANCE

REVENUE:
$585.7 million (-0.6%)

NET PROFIT:
$108.6 million (+9.6%)

DIVIDEND PER SHARE:
5 cents (unchanged)

Average revenue per post-paid user was $71, $1 higher than the second quarter last year. The average subscriber used 3.3GB of data per month last quarter. Chief executive Tan Tong Hai said that video streaming is the main driver behind the higher data usage, and this will rise as augmented reality takes off.

For example, Pokemon Go could consume 100MB to 300MB of data depending on how frequently the user plays the game, once it is released in Singapore.

Second-quarter pay TV revenue fell 2.4 per cent to $95.4 million on a shrinking customer base, eclipsed once again by enterprise fixed revenue which rose 1.9 per cent from a year ago to $98.6 million.

Second-quarter earnings per share was 6.3 cents, up from 5.7 cents in the same period a year earlier. Net asset value per share was 12.8 cents as at June 30, up from 10.8 cents as at Dec 31.

An interim dividend of five cents a share has been declared, the same as last year. StarHub said it intends to keep the annual cash dividend of 20 cents a share this year.

StarHub said yesterday it expects full-year revenue growth to be flat from last year, lower than the "low single digit" growth rate it had tipped in May as roaming and pay TV revenues continue to decline.

But StarHub now expects to post an earnings before interest, tax, depreciation and amortisation margin, or core profit margin, of 32 per cent this year, similar to last year's 32.2 per cent margin as the telco continues to trim costs.

Earnings were posted after trading hours. The counter closed six cents lower at $3.88.

A version of this article appeared in the print edition of The Straits Times on August 04, 2016, with the headline 'StarHub's net profit up 9.6% in Q2'. Print Edition | Subscribe

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